Personal loans are useful for meeting both planned and unplanned expenses. These unsecured offerings are easy to obtain and can be used to fund any kind of expenses. But choosing the right lender is particularly important if you wish to use this funding option judiciously. And this is possible only after you have compared the terms and conditions of the loan offers by various players in the market. Let us look at some factors that can help you select the best bank for a personal loan.
Eligibility Criteria
One of the first things you need to compare for the selection of the right bank for approaching for a personal loan is to check the eligibility criteria put forth by them. It is advisable to choose a bank that offers personal loans with easy-to-meet eligibility criteria. The criteria generally include a lower and upper age limit, some conditions related to the employment of the borrower and a minimum income level.
Interest Rates
Another important factor to consider is the interest rate on the personal loan. Do compare the interest rates charged by different lenders and choose the one that suits you. Higher the rate, greater is the cost of getting the loan. So, you need to work out your finances and then choose the best option. interest rate is generally linked to the credit score or the borrower with the ones having low credit score being charged a higher rate of interest.
Other Fees and Charges
In addition to the interest rates, personal loans may carry certain other charges and expenses like processing fees or penalties for late payments or bounced cheques. Low interest personal loans may sometimes come with hidden charges or high other charges that raise the overall cost of borrowing. So, consider all the charges and fees associated with a personal loan before finalising a bank.
Repayment Terms
A bank that offers you flexible repayment options is always preferable over the personal loan banks that do not. The flexibility to choose a repayment tenure according to your availability of funds is quite useful and convenient. You can always compare the various repayment tenures and the consequent EMIs to choose the combination that enables to you make timely repayments thereby reducing the chances of any kind of delays or defaults.
Processing Speed
The speed at which a bank or a lender processes your personal loan application is especially important as most of the times personal loans are used to fund some urgent requirements. Any delays in processing may render the whole process useless. Choose a bank that offers instant personal loans or quick processing of your application. You on your part should keep all the necessary documents and data ready for submission or uploading to facilitate fast processing.
Disbursal Speed
The speed at which a loan amount is disbursed is as important as the speed of processing of the loan application. A bank that offers quick disbursal after your loan application is cleared should always be preferred. For this, you should provide the lender with your bank details where you wish the loan amount to be transferred.
To conclude, choosing the best bank for a personal loan requires the comparison of various lenders on several fronts including the interest rates, other terms and conditions, the processing and disbursal speed and repayment flexibility.